Legislative Update

Ted Simons: Good evening and welcome To "Arizona Horizon." I'm Ted Simons. Plenty of activity at the legislature, with everything from Medicaid expansion to bathroom regulations being considered. Here now with our weekly legislative update is Luige del Puerto of the "Arizona Capitol Times". Let's start with what sounds like the governor and leadership at the legislature trying to jockey around for position. Give me what I want -- what is happening here?

Luige del Puerto: It is not a threat, not yet anyway. The governor spokesperson said if it were a threat it would be laid out more clearly, and as you know, the governor has not been shy about sending other or communicating a threat, if that is what she intends. What is going on, governor asked legislative leaders to slow down the pace of sending bills to her office, and instead she wants them to focus on passing her priority agenda, Medicaid expansion, performance funding for schools --

Ted Simons: TPT is the sales tax simplification efforts.

Luige del Puerto: That's right.

Ted Simons: She is saying slow down with the bills. Are they sending a lot of bills her way?

Luige del Puerto: Not a whole lot. This is the time of the session when both chambers have already crossed over bills that have been passed out of their chambers and the other chambers is hearing those bills. We will see a lot of the bills getting voted for and getting passed.

Ted Simons: She is basically saying don't do that before you do this?

Luige del Puerto: Yes, in a kind of soft diplomacy kind of a way.

Ted Simons: Yeah. The hard diplomacy would be a threat of vetoes. Is that just over the horizon here?

Luige del Puerto: It is possible, if the governor does not get her Medicaid expansion, for one. I think many have not precluded the idea of the governor saying you know what? We will stay here as long as you get me what I'm asking you to do.

Luige del Puerto: When I left the office this afternoon, still ongoing. Last person I saw speaking in the committee was Glen hammer in the state chamber and he was in support of the expansion--

Ted Simons: What was said, what was emphasized?

Luige del Puerto: Nothing really novel and new about the argument -- some members were concerned about the fact that it would potentially increase the federal debt. There was concern about the requirement that since this is a tax increase, that it should require two-thirds vote in the state legislature. There were party -- told the lawmakers just keep in mind that the grass roots are against this proposal. On the other side, we also saw the usual, typical arguments for an expansion and how this would be good for the state and how we would be drawing down federal funds to pay for the insurance coverage bill on access.

Ted Simons: Grass roots vote, you mentioned that the governor said it really wasn't a threat. Those people are threatening?

Luige del Puerto: Yes, they are threatening. Pass out resolutions saying that we don't want Medicaid expansion. Implicit in the resolutions is a threat to republican lawmakers who may be supportive of the plan. They would get challenged very likely in a primary if they did vote for the governor's proposal.

Ted Simons: We are seeing the governor's point person at the legislature. Heather Carter. She has already found opposition. The name of the -- Heather Casey is going to be facing Heather Carter?

Luige del Puerto: Yes, it is a battle of the Heathers, if you will. Heather Casey is a nurse and works at a children's hospital in the valley. And this week she filed paperwork to run against Heather Carter, precisely because of Carter's support of the governor's Medicaid expansion plan.

Ted Simons: Is this a real threat or more like a warning shot to others?

Luige del Puerto: It is hard to say at this point. Ms. Casey held a media briefing at noon at the state capitol. It was lightly attended. There wasn't much press there. Party activists helped out to organize the press conference. What was interesting to me about the media briefing, she said she is challenging Heather Carter because of the Medicaid expansion proposal, she refused to answer questions about what she is against in the Medicaid expansion plan.

Ted Simons: It almost has an Olivia Cortez feel to it--

Luige del Puerto: It is tough to stay how serious she is as a challenger. Heather Carter is very well liked in her district. Last primary, she won 40% of the vote. The second place, John Hollin, who got, I think, 23% of the vote.

Ted Simons: It will be interesting to see how much name confusing, Heather Carter, Heather Casey. Interesting.

Luige del Puerto: Heather Casey is also from the same precinct where Heather Carter is from.

Ted Simons: Before we let you go, Luige, we have to get to this bathroom bill. Explain what a striker bill is.

Luige del Puerto: Essentially an amendment to a bill that is still alive and so you -- the idea is that you want to revise a proposal -- you take out a draft -- you take out a proposal, put it on and tag it on, attach it to a bill that is still alive. It didn't actually happen, but offered a striker that would deal with the Phoenix decision last February if I'm not mistaken to expand the antidiscrimination ordinance.

Ted Simons: Block transgender folks from using the --

Luige del Puerto: Impact of the proposal, what he wants to do, essentially penalize a person that walks into a bathroom, locker, that clearly says it is of female sex or male sex and you were of the other sex and went in. It would be disorderly conduct under the proposal.

Ted Simons: True emergency clause --

Luige del Puerto: It has an emergency clause. This is a way of getting to the Phoenix ordinance and ensuring that it doesn't get implemented?

Ted Simons: Do we know how this will be enforced?

Luige del Puerto: That is tough to say. Proposals like this one it is tough to see how they would be implemented on the ground. How would you know if a person is of one sex or another sex, first of all? It would be asking a person not to go in and that person belongs to that sex. It is tough to see how this plays out.

Ted Simons: I will be curious if it does get to the governor's desk what she would do with that.

Luige del Puerto: I would be curious to see what happens then.

Ted Simons: Thank you for joining us.

Luige del Puerto: Thank you.

Sales Tax Reform Impact on Cities

The Governor’s plan to reform Arizona’s sales tax has cities worried that they will lose revenues. Ken Strobeck, Executive Director of the Arizona League of Cities and Towns, will tell us more about the concerns of cities and bring us up to date on negotiations to resolve the issues.

Ted Simons: The governor's plan to change the state's sales tax system continues to meet resistance from cities and Towns that say some of the changes would cut into Municipal revenues. Here to talk about those concerns is Ken Strobeck, president of the Arizona League of cities and towns. Good to see you again.

Ken Strobeck: Thank you, thank you for inviting me.

Ted Simons: Let's start with the idea of reforming or changing the state sales tax -- does it need reform?

Ken Strobeck: I think it probably does. A system that has been place for over years. Take a step back, 30,000 foot view of the whole system and talk about why we are even in this situation. The state and the cities over time have made a policy decision that we are going to be dependent on sales tax in the state. That is what our main bread and butter is going to be. We have a lot of things that play into that. Tourism, home building, all of the things that built our economy based on sales tax as a revenue source. We are not like a lot of other states that are dependent on property tax for local government or have a very high income tax. Over time, we have put a lot of things on to the sales tax, and, yeah, it is probably time to take a look back and do reforms on it.

Ted Simons: Arguments are, too much paper work? Too many jurisdictions, too many interpretations for auditors? Are all of those things valid?

Ken Strobeck: To some extent. Model city tax code, different tax base than the state does. Everyone of the 91 cities and towns can adopt their own tax base and rates on a variety of different taxable items. That is where people say the confusion comes in. And that is what needs reform. But, again, I go back to the system that we don't have property tax. Half of the cities in Arizona do not have any property tax at all. You will not find that in any other state. When a lot of critics come out and say we have a complex tax system and it is unlike any other state. My answer is yes, it is unlike any other state and we built it that way on purpose –

Ted Simons: can you then simplify it? For more use. We know what the governor thinks. We know what those who think that it is a good idea to simplify and get one form and one point of contact and one audit and keep the small business especially from having to deal with all this different cities and the different model compacts. Is there a way to streamline it? Get everything through one portal and then let it spread out as so chooses.

Ken Strobeck: I’m glad you used that word, portal, because that’s one of our proposals, and it actually builds on a bill that was passed last session that established an online portal for the 18 self-collecting cities in the state. There are 18 of the largest cities that have their own sales tax system, and the complaint among small business owners is that we have to go file different tax forms for each of these self-collecting cities. Couldn’t we do that at one stop online? And so this bill was passed last session, Representative Rick Gray pushed this bill and it was signed into law that creates an online portal for the self-collecting cities. Our proposal, and our negotiations this year has been, let’s build on that. Let’s take that from the 19 self-collecting cities and expand that to all 91. That’s 73 more and get all 91 cities onto this plan.

Ted Simons: That becomes the one point of contact that the governor is looking for.

Ken Strobeck: Right. And that would be where businesses would have one point of licensing and one point of remittance for their taxes, whether going to a different city, multiple cities, the state. It would go through this online portal. We think this really does work. Actually, we have a tentative agreement with pretty much all of the stakeholders that is a direction we will be going down. This is something that I think will be beneficial for businesses going into the future.

Ted Simons: Can the same thing happen regarding audits? There is a lot of concern out there that everyone and their brother is doing an audit on these businesses, they don't know if it is up or down and it is a complete burden.

Ken Strobeck: Yes, I think this is another one where we have stream lining that can be done. Original proposal in the bill now moving through the legislature, all audits are done only by the department of revenue and no one else. We have a big problem with that. We are very, again, sales tax dependent state and a lot of cities have supplemental auditors or staff auditors that do auditing of local businesses that the DOR never gets around to because they concentrate on the large multi-city businesses. We are in negotiations on this issue and we are -- our proposal let the DOR be the lead in every audit. Let cities participate as additional resources and help and using their standards and have one point of contact for audit.

Ted Simons: Why not expand the DOR, department of revenue and let them handle everything --

Ken Strobeck: Why not let the people who know the local community, local businesses, answer to the local officials, why not let them handle the audits in the local communities? It is a much better system than let’s rent an auditor from the DOR --

Ted Simons: Big concern, three of them here. The biggy is the construction sales tax. Changing the tax on materials at point of sale. Why is that a bad idea?

Ken Strobeck: Because again, our system is built when it comes to home building. We had talked about impact fees in the past. Same issue applies in this particular tax. The tax is designed to mitigate some of the impacts of building and growth on the communities. So, a tax is assessed on a house or a commercial building once it is built, 65% of the total sales price. 35% is deducted for labor, and then that tax goes to the state and to the cities and the cities use that to pay for infrastructure, to pay for personnel, etc., that will be serving the new communities. It is part of a system that is built on growth. Changing to a materials-only retail system says that you may be building a house in the town of Gilbert, but you are buying all of your materials in Phoenix or buckeye or somewhere else, and they're getting the sales tax benefits and the community where the house is being built is getting nothing.

Ted Simons: Is there a system, can you do something along the lines, well, yes, you keep it at the point of sale. The tax money itself is redistributed in ways that cities like the Gilberts, fountain hills-- obviously they would get hurt by this. Is there a way to redistribute the money at a later date?

Ken Strobeck: Argument on the other side it does go through the state sales tax revenue sharing system. If the pie is expanded with more purchases happening in state, we will get a piece of that. Cities and towns get some of the state sales tax revenue distributed back to them in the form of revenue sharing. The issue with that, it wouldn't go to where the growth is. Revenue sharing distributed on a population basis. Additional revenue would go where the population is, not necessarily where the growth is happening, and furthermore, there is a big hurdle that we have to get over which is a disagreement about how much now is in noncompliance. The DOR and some of their studies say that there is 31% in noncompliance now. We have auditors in cities who say it is closer to maybe 5 to 10 %. The difference between those two numbers is huge in terms of revenue.

Ted Simons: Is there a way looking at the whole ball of wax, is there a compromise, a way for you guys to get what you are concerned about, about the governor and proponents of a simplification plan to do something to help small businesses?

Ken Strobeck: I think definitely there are in at least two of the three areas. Administration, auditing, jury is still out on whether we can come to a resolution on construction sales tax. Another element that has to do with administration, and that is to comply with the federal marketplace fairness act which would allow the taxation of internet sales. We have to be in compliance with that. There are some differences between our interpretation of what is in compliance and also the other side.

Ted Simons: Would you prefer to see no changes at all, if it means some of the things you are concerned about, regarding construction?

Ken Strobeck: I believe that we can reach a compromise on those issues. And if it comes to construction, I would probably say we are better off to hold off, not do anything that would be irreversible in the future. Let's do a study, get more data and address that issue later. Let's take the two issues we can work on and fix those this year.

Ted Simons: Thank you for joining us.

Ken Strobeck: Thank you.

Sparky Controversy

Arizona State University recently unveiled a revised look for its Sparky mascot. The new design has been scrapped after a huge backlash. Arizona Republic reporter Anne Ryman and ASU Downtown student government President Joseph Grossman discuss the changes.

Ted Simons: ASU's recent unveiling of a revised Sparky mascot was met with skepticism at best. The reaction against the new look quickly grew louder and stronger, so much so that the university decided to dump the new design and try again. I'll talk to a reporter and An ASU student government representative about the change, but, first, some ASU students offer their thoughts On the mascot makeover.

SOT: There is aura about him that is not -- it is not Sparky. It is way to Disney and too animated. He is happy but for all of the wrong reasons.

Tyler Bell: I don't like the Sparky at all. I think his eyes are big, weird looking. I feel like he is a little kid toy kind of thing. I don't like that at all. We are in college. We should have a mascot that is kind of scary looking. We're Sun Devils. That is how I feel about that.

Tyler Bell: They sprang it on us. They didn't tell us they were going to be bring out a new sparky, they did let us have any input in it.

Emily Schilling: I was pretty upset. It looks like an alien to me. Very cartoon. I feel like it is not threatening and it goes very far from the original Sparky. And I like that the original one was made after Walt Disney and I feel like this was Disney trying to get rid of that, trying to get rid of the evil Walt Disney image. I just thought that was weird.

James Corbett: It looks like something on a cereal box.

Aubree Abril: I thought it was weird looking. It looks like a bumblebee looks super evil. I know he is supposed to be a devil. I'm like no, it is just too much.

Ted Simons: Here to talk more his all-consuming nightmare For ASU loyalists is Anne Ryman, who has been covering the story for the "Arizona republic." also joining us is Joseph Grossman, president of the undergraduate student Government at ASU's downtown campus. Good to have you both here. Thank you for joining us. We are having a little fun with this. But are you surprised with the reaction that this thing got?

Anne Ryman: Yes and no. College mascots are very historic and traditional. There have been other cases when they have tried to change them or alter them slightly people get very upset. I would say generally, yes, the reaction kind of surprised me.

Ted Simons: The idea of -- why was a new Sparky needed? What was the reason here?

Joseph Grossman: I think the university is actually trying to approach a younger audience and kind of get more buy in. If you hear about the new American university, we talk all of the time about trying to get the entire community and embed them into the culture of the issue. I think that was the approach that they went. However, we have had a plethora of different changes from up until today. And this is just kind of the approach that we currently took.

Ted Simons: How long -- do you know how long the decision was made? And what the criteria was for this new Sparky? What are you looking for?

Anne Ryman: Looking for something that would appeal to a younger audience. More of a superhero features. And so they kind of used that -- apparently they did a lot of marketing research also. This wasn't a decision that was made lightly.

Ted Simons: Indeed. And I would imagine, as we take a look at the new Sparky or the long-gone Sparky, whatever you want to call him, it doesn't look like much of a superhero to me.

Joseph Grossman: No, I wouldn't say it looks much like a superhero at all. I think it is interesting. It was coming out at the same time the pitch fork that was coming out, initiated two years ago. Numerous amount of focus group that was supposed to do this and then it got to this point. They are planning on having action comic books and all of that stuff as well.

Ted Simons: I think he has a little emotional trouble there, if you ask me. Again, he has to do stuff like that. He has to be a mascot. When he looks like a villain from a s film, it doesn't seem like a lot of folks are buying into that.

Anne Ryman: The other thing that confused people is they also have the iconic logo from . It has been around. And I think some people thought that they were going to get rid of him also. And so that may have played into some of it. There were people that did look at the costume mascot and didn't like it. And then there were other people who also thought that that little beloved Sparky that we see everywhere is just -- is going by the wayside.

Ted Simons: Yeah. With your position as president, do you get a lot of response, a lot of reaction?

Joseph Grossman: Yes, I mean, in my role specifically, there was a lot of uprising, a lot of students didn't like it. I got contacted by a numerous amount of alumni and so forth. The university handled it very well. Took the feedback and we met with them a week, two weeks after, we originally thought it was going from the athletics perspective but it was handled under public affairs. We went in and met and we met the compromise where currently are approaching where students, faculty, alumni, and each student would get one vote and that would be the change of the Sparky. You look at Oregon, Oregon when they had the mascot, tried to make changes, there wasn't much push-back -- push-back from the students but the university was not very accepting of that. In this case, I think the university did a good job in handling it and trying to please the rest of the university and alumni base --

Ted Simons: What kind of reaction did you get from the university on this?

Anne Ryman: From the university itself. It is difficult to -- for something that didn't work out all that well.

Anne Ryman: From their constituents, they have heard a lot of feedback is how they worded it. Based on that, they decided to go to a vote. And the feedback that I'm getting from readers is that, you know, they're anxious to take part in the vote. There is a lot of people, especially alumni wondering how is this going to work? How will I vote? Do they have my email address? How are they going to reach me? How many times can I vote? I was hearing from people today especially that they want to be sure that they have input in this and they are wondering will the Sparky mascot that is currently out there be offered as one of the choices?

Ted Simons: That brings me to my next question. From what you have heard and when you were reporting on this and people were telling you and the comments and these sorts of things, was it the fact that they changed Sparky or was it the fact that they changed Sparky to this dude?

Anne Ryman: I think it was the latter. It was a big change. Some people said they were okay with smaller change. Smaller changes. There are people that say well, maybe his outfit needs to be updated a little bit. But it was the fact that it was such a big change.

Ted Simons: Where do we go from here?

Joseph Grossman: Yeah, well, I mean, I think now what we are doing we are getting options for students, alumni, faculty and staff to have a say on that. There is a date for that. We are trying to roll all of that out. I think there is a good response. There was a lot of negative reaction to this. Especially since it wasn't a small change. It was a huge change. Even coming from myself when we first found out about it, the process in that situation was not what we were most favorable of. Yes, granted the university moves quickly and something that was done two years ago, the whole -- a year, two-year basis. With that being said, I think that the next step will be everyone gets one vote. That will go through the process to make the Sparky how they see the university can apply or give them options and they will get to create that and a voting process will go through and we will see which one that ends up being at the first home football game.

Ted Simons: Very good. Amazing how a mascot can cause such havoc. Good to have you both here. Thank you for helping to explain it to us.